On April 3, 2006, McTiernan was charged in federal court with a single count (18 USC § 1001(a)(2)) false statement for misrepresenting the number of times he had hired private investigator and wiretapper Anthony Pellicano. This false statement was made to an FBI agent during the agent's initial contact with McTiernan via an evening phone call to McTiernan's home. He was arraigned and pleaded guilty on April 17, 2006, and is the 14th person charged in the Anthony Pellicano case. McTiernan has never been charged with wiretapping.

McTiernan was charged with an information, rather than in grand jury indictment, which means he waived his right to an indictment and suggests he may have reached either a prior plea agreement with prosecutors or some sort of cooperating agreement.[4]

Some time later, upon retaining new counsel, McTiernan attempted to withdraw his guilty plea because his prior counsel had not offered an available defense.[5] On September 24, 2007 this bid was denied by Federal District Judge Dale S. Fischer. She then proceeded to sentence McTiernan to four months in prison and $100,000 in fines for lying about his relationship with Pellicano. McTiernan's lawyers had asked for no jail time, arguing that the Department of Justice policy manual stated that no single False Statement charges would be filed against an individual. The prosecution argued that the manual is a guide and the government should not be held to the statements contained in it. The judge sided with the prosecution and characterized McTiernan as someone who "lived a privileged life and simply wants to continue that." He was ordered to surrender for incarceration by January 15, 2008. His lawyers stated thereafter he planned to appeal this conviction.[6] Fischer allowed McTiernan to remain out of prison on bail pending his appeal of her decision to the 9th Circuit U.S. Court of Appeals.[7]

In October 2008, a federal appeals court vacated McTiernan's four-month sentence and ruled that Judge Fischer had erred and he was entitled to a hearing as to whether his plea could be withdrawn given that prior counsel did not state with sufficient clarity that he had offered McTiernan a defense. The prosecution agreed for McTiernan to withdraw his plea rather than proceed with a hearing and Judge Fischer allowed McTiernan to do so on February 24, 2009. The case remained open, with prosecutors intending to proceed a second time against McTiernan on the same charge.[8]

In December 2008 and with subsequent updates in 2009, McTiernan released a video entitled "The Political Prosecutions of Karl Rove", which was posted on YouTube[9] and the PoliticalProsecutions.org website.[10] The video exposed prosecutorial misconduct in numerous cases throughout the country believed to be politically motivated and cast a shadow on the U.S. Attorney's Office. Shortly thereafter[when?], the Government quadrupled the charges against McTiernan.

First and Second Superseding Indictments were filed against McTiernan. He was charged with two counts of a False Statement (18 USC § 1001 (a)(2)) and one count of False Statements before a Court (18 USC § 1623). The charge of Possession of a False Paper to Defraud the U.S. appears to have been dropped and was related to McTiernan's having a written declaration in support of his motion to withdraw his guilty plea.[11]

According to McTiernan's attorney, former Mississippi Supreme Court Justice Oliver Diaz, the prosecutors filed two charges against McTiernan for the same utterance to the unverified FBI agent, and a third charge for perjury since he had asked to withdraw his guilty plea. During pre-trial hearings Judge Dale S. Fischer ruled that it is irrelevant that one does not know to whom they are speaking in order to be charged with a felony. McTiernan would not be allowed to present evidence that the phone call to his home, after hours, with an unverified agent was in direct opposition to FBI Manual of Investigative Operations and Guidelines (MIOG).[12] Nor would Fischer allow an expert witness, a former FBI agent, to testify on behalf of McTiernan. The defense stated that a citizen should not be charged with lying to someone if one cannot verify their identity as that of law enforcement. McTiernan's defense was to include the FBI guideline which stated that "Credentials (commission cards) shall be exhibited to all persons interviewed by Special Agents so there will be no doubt concerning the organization with which they are connected."[12]

Due to court rulings that would not allow a defense and an exposure of a 15-year sentence, McTiernan, upon insistence of counsel, entered a conditional guilty plea in order to get back to the Ninth Circuit Court of Appeals. Judge Fischer sentenced McTiernan to one year in prison though no additional criminal activity was indicated since his plea was allowed to be withdrawn. Diaz stated "his client was forced to plead guilty to what most people do not even know is a crime" and is a "victim of prosecutorial vindictiveness". McTiernan was then released free on bail pending appeal, with Diaz confident his client would prevail.[13]

On August 20, 2012, the 9th Circuit Court of Appeals denied McTiernan's appeal, though he was granted the opportunity to address a higher court and reappeal. McTiernan and his attorney were confident that they would not be denied when they did so.[14] At issue before the Supreme Court was whether the suppression of the recording of Anthony Pellicano and McTiernan would be allowed; no other issues were before the court. However, on January 14, 2013, the U.S. Supreme Court declined to hear McTiernan's case.[15]

During the appellate process, McTiernan had access to the Government's key witness who signed a statement that no wiretap was done on behalf of John McTiernan and that she had never seen the evidence the Government claimed were synopses of wiretapped calls of Charles Roven. This witness also testified during the 2008 trial of Anthony Pellicano, that Charles Roven's company, Atlas, was a Pellicano client. On May 23, 2012 McTiernan's lawyers filed a motion to vacate the sentence as the sentence was based on false evidence.[11]

On February 8, 2013, a supplement to the motion to vacate was filed that pointed out questionable prosecutorial practices. Requests by McTiernan's counsel for discovery were ignored by the Government. Days before the trial was to begin, and the subsequent conditional guilty plea entered, the Government turned over the evidence against McTiernan. McTiernan's computer expert determined that contrary to the Government's representation, the data was encrypted and "recovery of any content would be impossible and verification of the content would also be impossible."[11]

The source of evidence against McTiernan has never been provided by the Government. McTiernan was scheduled to surrender to federal prison on April 3, prior to Judge Fischer's review of the defense motions.

Mr. McTiernan served his 12-month jail sentence in a minimal-security Federal Prison Camp, Yankton, South Dakota, that contains 800 male mainly white-collar crime offenders.[16] While interviewed, his wife Gail Sistrunk McTiernan shared that he was not taking incarceration well.[17] A campaign titled Free John McTiernan was created on Facebook,[18] which garnered the support of prominent Hollywood names as Samuel L. Jackson and Alec Baldwin. The Facebook campaign has since been transformed into a news page which brings attention to cases of other apparent legal injustices.

McTiernan was scheduled to be released in April 2014; despite his sentencing prohibiting reduction of his time for good behavior, he was released from prison on February 25, 2014.

On July 3, 2006, McTiernan's former wife, film producer Donna Dubrow, filed suit against him for invasion of privacy and other claims arising from her belief that he hired Pellicano to wiretap her telephone. Judge Dale S. Fischer refused to give any credence to the claim when it was mentioned by the prosecution during McTiernan's hearing.[19]